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Comparing T-Mobile's Jump and AT&T's Next plans: Who's cheaper?

You may not be stuck with your cell phone for two years anymore. T-Mobile and AT&T have new plan options they say will make it easier and cheaper to upgrade to a new smart phone sooner than the traditional 24-month contracts allow. They do, but you'll have to pay a little more each month to reap the benefits. While the fees and conditions vary greatly, both programs work in the same basic way: You fork over more each month so you pay off a bigger chunk of the phone subsidy much sooner.

We broke down the costs of owning an iPhone 5 on both plans, factoring in the cost of one upgrade to a similar-priced phone. As the table below shows, AT&T's plan removes the shock of a down payment, though in the long run, T-Mobile's significantly lower service costs actually make it cheaper to use that iPhone 5. The details:

With T-Mobile's new Jump program, customers pay $10 more a month on their existing T-Mobile Simple Choice plan. That $10 fee includes phone insurance with a $175 deductible, and access to Lookout Security's premium services, which provides the option of wiping your phone clean if it's lost or stolen. (Lookout charges $29 a year for the service included with T-Mobile's Jump fee.)

There's no monthly fee for joining AT&T's Next program. Rather, the cost of the phone is divided into 20 monthly payments, which is added on top of AT&T's traditional monthly fees. If you want insurance, AT&T's costs $7 a month with a $200 deductible.

T-Mobile Jump customers can upgrade their phones once or twice a year, beginning six months after joining the program. AT&T Next customers can upgrade once a year, the first time after 12 months. If you try to upgrade earlier than either program allows, you'll have to pay off the complete balance of the phone.

Note: As we posted this article, Verizon launched its own early upgrade program called Edge, which also divides the full cost of the phone over 24 months, and adds that cost to Verizon's prepaid plans. You have to pay the first month at the time of purchase. You can upgrade after 6 months, after you pay off 50% of the full retail price of the phone. The plan will be available on August 25. We'll have a cost-breakdown/comparison of this new program soon.

Plans
T-Mobile Jump
AT&T Next

Downpayment for a 16GB iPhone5

$146

$0

SIM card fee

$10 (new customers only)

$0

Phone payments

$21 a month for 24 months

$32.50 a month for 20 months

Total cost of phone

$650

$650

Number of upgrades permitted

2 in 12 months

1 in 12 months

Upgrade cost

$145

$0

Service costs

$60 with 2.5GB of data; $70 with unlimited data, plus $10 a month Jump program fee